Which Way Now For Leeds United?

In a sense, the single most surprising aspect of Massimo Cellino was its timing. As the office workers of this country fumbled their way through their first cup of coffee of the morning, the news came through from Italy that Cellino had been found guilty of evading import duty with regard to the purchase of a yacht which was impounded in 2012 and fined €600,000. It was news that GFH Capital, the current owners of Leeds United and a group who had turned away from a more or less home grown bid to purchase the club two months ago, could scarcely have wanted to hear less.

Cellino’s previously imminent appointment had not been universally popular amongst supporters – though, in keeping with the recent fashion amongst football club owners in this country, dividing the club’s supporters seems to have been the order of the day here – but he was their Get Out Of Jail Free card. Leeds United has been losing money hand over fist for some time now and GFH had been looking for a way out. Now, having apparently burned their bridges with the consortium headed by Andrew Flowers, they may well find themselves back to square one in terms of their exit strategy from Elland Road.

The Football League’s response to the verdict of the court was the one that many people had been waiting for, but their immediate response to the decision of the court was guarded, saying only that it had “noted the outcome” of the case and were “engaged in an ongoing dialogue” with Cellino’s legal team. It doesn’t seem unreasonable, however, to argue that Cellino’s bid to take ownership of the club is now in serious danger of failing altogether.

His legal team may be suggesting otherwise at the moment – and the way in which Eleonora Sports, the company that is behind the take-over, is structured, could even be considered to have been a pre-emptive move against any potential obstacles being put in Cellino’s way by the Football League, with Massimo only owning a minority share-holding in real terms – but the harsh truth of the matter is that, in its previous statements on this thorny matter, the Football League stated that it would be waiting until the verdict was in. Well, now the verdict is in, and it’s not the one that would have afforded them an easy life. The Football League, in other words, now has to show whether the Owners & Directors Test means anything to them at all.

So, Cellino will appeal the verdict of the court – a process that is unlikely to be speedy. His lawyer claimed this afternoon that this conviction changes nothing because he cannot be considered “guilty” until the appeals process has been exhausted. The Football League, of course, has no obligation to listen to such arguments. Alternatively, Cellino’s could opt to try and challenge the Football League’s decision. This, however, would not necessarily be the wisest move, either. For one thing, these ownership rules apply just as much to shadow directors – people who, for one reason or another, control businesses without taking a seat on the board of directors – as to any directors who are listed at Companies House, and it seems difficult to believe that the Football League would allow such a potentially divisive take-over to go through, depending on legal technicalities to do so. For another, it really is, their house, their rules, and Cellino is unlikely to make too many friends if he starts throwing writs at the Football League.

The League has received some extremely bad press over the course of this season for its dealing with matters that it should have been well and truly in control of such as the woeful situation at Coventry City and the fact that it waved through Carson Yeung as the owner of Birmingham City in spite of him having two convictions at the time of his passing of the “test.” Should it let Cellino slip through the net (without taking into account the possibility of a successful appeal), it would seem reasonable to suggest that this “test” has thoroughly outlived its usefulness.

The question of which way now for Leeds United, however, is not necessarily an easy one to answer. Everybody knows which way the team is going on the pitch, with only two straight wins to lighten a gloom that has descended over the club since the middle of December. In fifteenth place in the table and with a twelve point buffer between the club and the division’s relegation places, it seems highly unlikely that Leeds could be pulled into a relegation scrap, even if their form over the last three months or so has indicated that this might be where they could end up, but another season can now be considered closed, while arguments continue to rage behind the scenes over the club’s future.

Both GFH Capital and Chief Executive David Haigh state that administration is not an option for the club. The owners spent around £40m buying the club from Ken Bates on top of losses incurred since then. The sale of the club through administration would see that money paid to purchase the club lost and the likelihood of a return on loans put in since then being little more than coppers for every pound spent. What seems more likely at this stage will be that the club will be put back up for sale in the event that the Celllino bid fails, and that Leeds United supporters will have to cross their fingers yet again that this time somebody can be found who will consider the club as more than a plaything or a way to turn over a few million pounds quickly.

Perhaps Leeds United finds itself in this sort of scrape with such wearying regularity because of its size and scale. Potential new owners take one look at Elland Road, watch a video of the 1991/92 championship winning side, tot up the potential backsides on seats and decide that this is too good an opportunity to miss. But it isn’t, of course, as easy as that. Business seldom is. There is no question about the fact that Leeds United Football Club is capable of returning to the Premier League and staying there with room to spare. But it needs care to do so. It needs the right owner, someone who is prepared invest wisely into it whilst persuading supporters who have put up with more than most over the last ten years. Until then, Leeds United will continue to exist in footballing purgatory, waiting in apparent perpeuity for someone to rescue it from a ten year long nightmare.

About The Author

Ian began writing Twohundredpercent in May 2006. He lives in Brighton. He has also written for, amongst others, Pitch Invasion, FC Business Magazine, The Score, When Saturday Comes, Stand Against Modern Football and The Football Supporter. Ian was the first winner of the Socrates Award For Not Being Dead Yet at the 2010 NOPA awards for football bloggers.

2 Comments

China white on March 19, 2014 at 3:38 am

Show me one comment from the FL where they confirmed they will be waiting for the ‘verdict to come in’ before making a decision? This has always been the Medias assumption based on the FL’s comments that they were waiting for ‘further information to be supplied’

It’s been a shoddy piece of Journalism all round that the Media has lept to this conclusion because it made their articles more sensational.

Mike Landers on March 20, 2014 at 9:21 am

So, China White, where exactly is the article in error?

The fact that Leeds fans after the Ridsdale years, Ken Bates and a Middle East hedge fund are still yearning to be taken over by a convicted fraudster and tax evader (to the extent that they were unveiling supporting banners at Turf Moor on Saturday) shows that they just won’t learn their lesson.